Dow breaks through 11,900 on optimism
NEW YORK » The Dow Jones industrial average broke through 11,900 to close at another record high yesterday, boosted by optimism over the health of corporate earnings.
The index's gain marked its fifth record close in two weeks; the Dow also set a record intraday high.
The markets were upbeat yesterday, with investors focusing on positive news from well-known consumer brands such as McDonald's Corp. and on economic data that indicated the economy was holding up even as it slowed. Oil prices, which remain near lows for the year, also boosted the mood on Wall Street.
"In general, we're getting friendly reports between oil inventories being up higher than expected and then some bellwether companies that are exceeding estimates," said John C. Forelli, portfolio manager for Independence Investment LLC in Boston. "It's kind of a return to the Goldilocks economy."
The Dow Jones industrial average rose 95.57, or 0.81 percent, to 11,947.70. The advance put the 12,000 threshold within investors' sights. The previous record close, from Tuesday, was 11,867.17. The intraday high set Thursday was 11,959.63, eclipsing an earlier record of 11,872.94 reached Monday.
Broader stock indicators also moved higher. The Standard & Poor's 500 index was up 12.88, or 0.95 percent, at 1,362.83, and the Nasdaq composite index showed the day's biggest gain, advancing 37.91, or 1.64 percent, to 2,346.18.
Oil prices hovered near year lows following an Energy Department report that inventories were higher last week and amid doubts about whether OPEC's members will be able to agree on an immediate production cut. The price of a barrel of light, sweet crude, which settled at a low for the year on Wednesday, rose 27 cents to $57.86 on the New York Mercantile Exchange.
Investors got a look at the state of the economy with the release of the Federal Reserve's Beige Book, which summarizes regional economic activity. The report found that economic growth appeared to be moderate or mixed -- findings that seemed to reassure investors looking for the economy to slow at a reasonable pace.
Kevin Logan, chief U.S. economist at Dresdner Kleinwort, said the Beige Book's tone was more optimistic than the one issued in August.
"They didn't say there was much of an inflation problem. Investors saw this as confirmation that the Fed is on hold," he said.
Investors have been keeping close tabs on the Fed as they try to gauge how quickly the economy is slowing.